When you work for someone else, your paycheck is always expected on a certain day, and by law it must arrive. The security that comes with working a full-time job no longer exists as soon as you begin freelancing; it is now up to you to collect money for services rendered.
If you are uncomfortable with asking for money, or with billing clients after a job is finished, then you’ll either have to find another line of employment or learn how to do it, because a business can’t survive if you work for free. The trick is to come up with a set method of invoicing, and to make that method clear before you even begin working on a job.
If you provide freelancing services, you should have a contract – or agreement – that must be signed before work commences. Have an attorney look over the contract before you submit it to clients, and never start work until you have a signed copy in your hands.
The contract should state the method of payment, when it is expected, and the consequences for nonpayment. As long as those three factors are made clear, you are covered.
It is certainly advisable that you receive a deposit before beginning a project. The most common amount is 10%, though some freelancers require as much as 50% up front. Whatever number you choose, the deposit requirement should be strictly enforced. Never begin a project without a signed contract and a deposit up front.
Example in your contract: “Before work on the project can start, a 10% deposit is required from the client. This deposit will be subtrated from the final payment amount owed.”
Time To Pay
Some freelancers perform large projects that cost thousands of dollars. If this is the case, your clients may want to set up a payment schedule. For example, if you charge $5,000 for a 30-page website, the client may want to pay you in $1,000 increments for five months. If this is an acceptable agreement, get it in writing and attach it to your contract. You should also obtain the name, phone number, address and fax number of each client so that you can reach them at any time.
Example in your contract: “If payment cannot be made in full, we will arrange for installments to be paid on a monthly basis. This payment structure is non-negotiable, and must be signed by both parties prior to commencement of work.”
Your contract should state exactly when payment is due. For example, you can state that payment is due three days upon completion of the project. That way, you are assured to be paid promptly. If you are in any way unclear about this, you could be invoicing customers for three years before you see a dime – it isn’t worth it.
Example in your contract: “Payment is due three days after the final product has been delivered.”
Your contract should also clearly state the consequences for nonpayment. You are legally within your rights to demand interest on an overdue balance or a fee for every day payment is late. For instance, my company charges $25 for the first day payment is late and $5.00 for every day thereafter. If payment is late for more than thirty days, we levy a fee of $1,000 and reserve the right to pursue legal action.
This might seem overdramatic, but there are people who will take advantage of a freelancer who does not cover his or her rights. Avoid that eventuality and make sure you are legally covered.
Example in your contract: “If payment is not made by the third day after the final product has been delivered, a late fee of $25.00 will be added to the final payment, with $5.00 per day added after that.”
Your invoice should be professional and clearly understood. At the top, the following should be included:
– Company Logo
– Business Name
– Business Address
– Business Phone Number
– Business E-mail Address
– Business Fax Number
Underneath that heading, the word INVOICE should appear in large letters. The body of the invoice should break down each part of the project and list the price for each part, and then have a total at the bottom of the page. You should also have a section that says PAYMENT DUE and then write the date. At the bottom of the Invoice, thank the customer for choosing your company, and request that the customer use you again.
As a freelancer, you will occasionally run into customers that claim they can’t pay for such-and-such a reason. This is unacceptable. Calmly explain to the customer that you are a business, and that you require payment for services rendered. Let them know that you would be happy to set up a payment schedule, and to work with them in any way you can.
Be very clear that if you do not receive payment, you will be forced to consult with your attorney.
I realize that this doesn’t sound very nice, but business is business, and you work to make money. Don’t be taken advantage of just because your title is FREELANCER.
If you follow these guidelines, you’ll be well equipped to request money and to be paid on time. Remember, just because you work for yourself doesn’t mean that you don’t deserve payment for services rendered. Always behave professionally, and your clients will treat you as such.